‘Debt-Free U’ offers degree in saving on college costs
There aren’t a lot of students like him out there. After graduation, today’s college students owe, on average, more than $23,000.
There also aren’t many parents who haven’t signed up for a load of debt at the risk of draining their retirement savings and depleting home-equity accounts to make sure their kids get a college education.
His parents didn’t even try. They weren’t in a financial position to consider taking out loans for their son’s education.
Bissonnette, a personal finance writer and editor with AOL Money & Finance, has money smarts. That allowed him to have enough money saved to pay his own freight, but his aim here is to show others how they can do it, too.
For him, the drive to make money began at an early age. In second grade, he set off on an entrepreneurial path, selling small trinkets to kids at a local video store. He went on to sell old video games and more stuff found at yard sales on eBay. By the time he was in his first year of high school, he had a five-figure brokerage account.
When he headed off to college, he had the funds to cover the tab. Bissonnette has seen the currently flawed system first hand. He’s a contrarian, and his book is packed with studies and statistics to back up his analysis. It’s a magical combination that college-bound students and their parents should read, even if there’s plenty of money set aside to pay the tuition tab. There’s no harm in learning ways to get the biggest bang for your buck and the best education available at the same time. Here’s a sampling of his advice:
•To avoid getting pressured into making financial decisions that aren’t in your best interests, be wary of high school guidance counselors. Their job is to make their schools look good by sending graduates to four-year brand-name colleges, not to provide you with ideas on how to get financing for college. “They have no training as a financial planner … but the impact of a college decision is inextricably linked with the cost and means of payment.”
•Treat admissions officers and financial aid officers like you would a salesman at a car dealership. Do your own research.
•Pay for college monthly. Most colleges — especially large public institutions — offer monthly payment options that allow families to spread the cost over the semester. There’s often no interest charged, just a small setup fee (under $100). Ask your college’s financial aid or bursar’s office for information.
•Graduate from college in three years. Take community college classes during the summer.
•Students should take out federally chartered student loans, such as those offered through the Robert T. Stafford Student Loan program. No one should ever use private student loans.
•Don’t co-sign your kid’s loans. College guides and financial aid people may recommend this as an easy way to qualify for more loan money at lower interest rates. “If they miss payments, your credit score will be dinged, too — and, more important, you could be sued by the lender for payment,” he writes.
•Consider large public universities that offer honors programs. Classes are small, plus students accepted into these programs often have access to generous merit scholarships, regardless of financial need.
A couple of nitpicking caveats: He doesn’t spend a lot of time saying how he was able to accumulate enough money for his education. Although there are general references to the fact that he attends a large public school, the University of Massachusetts, and he worked hard and invested like a pro to earn his own money, there are few specifics of how he made his choices.
What will his four-year college degree cost? Is he following his own advice to graduate in three years? Did he take summer classes? How much does he earn to make ends meet? How does he work and go to class at the same time? How much did he have socked away before he headed to college? What were his best stock investments?
That said, even if it’s not much of his personal story, it is his well-researched analysis of how educated moves count when it comes to college choices. And that’s likely to pay off.
Debt-Free U: How I Paid For an Outstanding College
Education Without Loans, Scholarships, or Mooching Off My Parents.
By Zac Bissonnette
Portfolio; $16; 290 pages